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Stop Hunting using Sentiment and Market Structure

  • #181
  • Sep 10, 2019 8:35pm Sep 10, 2019 8:35pm
Current Snapshot of Currency Strength.

Haven't looked at any charts yet but based on this, I would imagine CADJPY is in a short term uptrend.

Since JPY is the weakest currency - and retail is shorting (trying to long JPY) - confluence of elements that actually matter line up. USD is somewhat neutral here - but still stronger than JPY and that is what we want.

One currency to be stronger than another - that is a directional hint for a trade. Afterall - we are pairs traders when we buy or sell any currency in spot FX.

I'd probably be more interested in looking at CADJPY sentiment and Buying CADJPY if I started looking at strength first.

Let's see what the chart looks like.
Attached Image (click to enlarge)
Click to Enlarge Name: Strength.PNG Size: 54 KB
  • #182
  • Sep 10, 2019 8:40pm Sep 10, 2019 8:40pm
And LOL. I thought I would see short term uptrend patterns. To the moon.

"Surely price has to turn around - I'll keep adding short until it does." ~ Retail

"I just want to get out at break even." ~ Retail

"I'm losing way to much - I can't take the pain anymore - I'm closing out all my positions. Price isn't turning around. I'm out!!! " ~ Retail

Price: Your sell becomes a buy. I'm going up for a bit longer. Thank you playing.

P.S. Can you see the Liquidity Gap Fill going on?
Attached Image (click to enlarge)
Click to Enlarge Name: CADJPY.PNG Size: 84 KB
  • #183
  • Sep 10, 2019 8:49pm Sep 10, 2019 8:49pm
Yes, very similar to what UJ is doing, what currency strength meter is that? I've tried a few , some change very quick, obviously working off smaller time frames so not always that useful.
  • #184
  • Sep 10, 2019 9:30pm Sep 10, 2019 9:30pm
Quoting Profitgrowth
Yes, very similar to what UJ is doing, what currency strength meter is that? I've tried a few , some change very quick, obviously working off smaller time frames so not always that useful.
Yes it is - because Yen is weak across the board as a basket currently. So there will be similar price patterns depending on what currency it is paired against.

The strength meter uses quantitative trading methods that rank and scale currencies cross-sectionally.

My trading friend Bob and myself came up with it and it has proven very useful. I have many times blindly taken trades by JUST looking at Sentiment and Strength. Entered Randomly - and checked back at key market close times. Discretionary traders get so used to trading with charts that we forget that you don't really need them if you have a reason for a trade.

Currency Direction (strength/weakness) and retail positioned on the wrong side of that is good enough reason to be in a trade for me. You can enter randomly and just check back at different session closes and see where the trade is. I mainly do this when I see HUGE bubbles developing on the sentiment chart and very strong strength/weakness readings.

Even though we designed the strength meter for various time frames, the lower time frames are NOISY - as to be expected and you'll hear that a lot in quantitative finance (even for longer term signals). The Higher Time Frames are much more accurate in directional orderflow both in discretionary and quantitative finance.

I typically look at 1H, 4H, or Daily strengths personally. The best signal for me is when those 3 or at least 4H and Daily are aligned.

This is probably a lot more advanced than I wanted to get to in this tread because you can consistently make money with a positive expectancy understanding Sentiment, Market Structure, and Stop Hunting techniques.

Keep it simple. It can be confusing if you have conflicting signals.

That being said, the more edge on your side - your probabilities of a successful trade go up exponentially.

For instance - if seasonally USD is strong in MAY (Hint: It is) and Currency meter has gone from weak to strong - and Retail is starting to Heavily Short USD - and Market Structure and order flow provides great setups - You can take a LOT more risk because the probabilities are very high that the trade will work out.

When the stars align....

But do you need all of that to be aligned to take a trade? No.

Can you trade with just 2 of those? Yes. So you choose the 2 that make the most sense to use. They have to prove themselves to you (most important) over time.

That's what I'm showing in this thread. It works. Showing the proof in real time.

I easily trade just knowing how to interpret Retail Sentiment and Market Structure - I hunt stop areas to enter and exit. Over and over again.
  • #185
  • Sep 10, 2019 9:44pm Sep 10, 2019 9:44pm
Quoting SentiFX
{quote} Yes it is - because Yen is weak across the board as a basket currently. So there will be similar price patterns depending on what currency it is paired against. The strength meter uses quantitative trading methods that rank and scale currencies cross-sectionally. My trading friend Bob and myself came up with it and it has proven very useful. I have many times blindly taken trades by JUST looking at Sentiment and Strength. Entered Randomly - and checked back at key market close times. Discretionary traders get so used to trading with charts...
Great post sentifx, A lot of knowledge to be learned here. Thank you!
  • #186
  • Sep 11, 2019 12:24am Sep 11, 2019 12:24am
Are you fractal or george?
Necessity knows no law except to conquer
  • #187
  • Sep 11, 2019 2:22am Sep 11, 2019 2:22am
Quoting SentiFX
If Retail keeps heavily shorting UJ - price will aim to fill this Liquidity Gap. That is the natural order of this particular situation. Price wants to fill the void. As always - news trumps charts. Anything that causes Risk Off will send UJ south. What are the probabilities that UJ will continue upward? Why? {image}
Hi
You wrote above retails are heavily shorting UJ but that's is not correct.
Your tool is showing they are heavily buying UJ.
Was it just a spelling error or I wrongly interpret your tool?
Thanks
  • #188
  • Sep 11, 2019 2:54am Sep 11, 2019 2:54am
Quoting 3ndlessHope
Are you fractal or george?
None of them.
He trades similar approach but the style is different and that guy's are still around FF
  • #189
  • Sep 11, 2019 3:07am Sep 11, 2019 3:07am
Seeing this thread for the first time. Sound all like FractalFreak 2.0. Good info anyway.
  • #190
  • Sep 11, 2019 3:08am Sep 11, 2019 3:08am
Quoting SentiFX
If Retail keeps heavily shorting UJ - price will aim to fill this Liquidity Gap. That is the natural order of this particular situation. Price wants to fill the void. As always - news trumps charts. Anything that causes Risk Off will send UJ south. What are the probabilities that UJ will continue upward? Why? {image}
I can think many reasons that create positive probabilities for the price to move up.

There is a liquidity gap meaning that there is no resistance until the price fills it.

Selling orders that algos want to fill at 100 Daily moving average.

Many stops around round levels 108.000 - 500 - 109.000, traders like to put their stops on and above these.

Fibonacci 78.6 level at 108.275, also traders use it like stop, sell limits etc. smart money will target that too.

High and lows, supply. There is a good resistance level, one day before the big engulfing candle, sell orders until this level will atract more buyers.

I can write a bigger list, there are many other losing systems that are against smart money and the price keeps moving on adding more pain.

Good trade, it was late for me, I trade at LO.
Looking for profitable short term trades ...|
  • #191
  • Sep 11, 2019 5:12am Sep 11, 2019 5:12am
Quoting Merka
{quote} None of them. He trades similar approach but the style is different and that guy's are still around FF
How do you know?
Necessity knows no law except to conquer
  • #192
  • Sep 11, 2019 5:20am Sep 11, 2019 5:20am
Quoting Mitiblotch
Seeing this thread for the first time. Sound all like FractalFreak 2.0. Good info anyway.
Similar to Fractal, in that it looks at stop hunting.

Not like Fractal, in that this discussion does not have any arrogance and any mystery around it.
It never gets easier, you just get better
  • #193
  • Sep 11, 2019 5:33am Sep 11, 2019 5:33am
Quoting Shabs19
{quote} Similar to Fractal, in that it looks at stop hunting. Not like Fractal, in that this discussion does not have any arrogance and any mystery around it.
Yeah... you hit it right. However, just like Fractal, there is a software which you cannot lay your hands on and it isn't for sale.
  • #194
  • Sep 11, 2019 5:34am Sep 11, 2019 5:34am
Quoting 3ndlessHope
{quote} How do you know?
He is using different tools than fractalFreak and the language is different as well.
I know George and some of his guys and he is not George as well.
  • #195
  • Sep 11, 2019 6:28am Sep 11, 2019 6:28am
Quoting SentiFX
This is a USDJPY trade that I'm in, got in at "magically" the right time and now exiting. After many years of trading, my entries are very precise and when I'm wrong, I know quickly. Look at sentiment. Entry based on Market Structure and Trading Psychology. I bought the Stops and now I'm Selling. {image} {image}
So let me get this right.....UJ showed strong BUY sentiment via the software, buyers were buying up, sells stops just under the i avalanche, price comes down to those stops, and you bought them. Price reacts at the base and pushes up, your now looking to exit or sell now?
  • #196
  • Sep 11, 2019 6:33am Sep 11, 2019 6:33am
Quoting Mitiblotch
{quote} Yeah... you hit it right. However, just like Fractal, there is a software which you cannot lay your hands on and it isn't for sale.
He has offered to supply a limited free version here. https://www.forexfactory.com/showthr...1#post12494891
and if this is a ruse to farm email addresses then this thread should be moved to commercial thread.
Maybe the OP can declare his intentions clearly here.

It's all interesting, there are many similar products available paid & free, but essentailly if you do not understand how to trade market structure, then it really will not help you. The tool is to give you a reason to consider the trade only.

Quoting johnnysmith
{quote} So let me get this right.....UJ showed strong BUY sentiment via the software, buyers were buying up, sells stops just under the i avalanche, price comes down to those stops, and you bought them. Price reacts at the base and pushes up, your now looking to exit or sell now?
The difference is, are you looking for a reversal at market structure or profit taking in a trend ?
It never gets easier, you just get better
  • #197
  • Sep 11, 2019 6:55am Sep 11, 2019 6:55am
Awesome lesson.
With thorough observation and practice, the concept is very reliable.
Thank you, SentiFX for the generosity. Profitable trading to you.


Quoting SentiFX
{quote} Yes it is - because Yen is weak across the board as a basket currently. So there will be similar price patterns depending on what currency it is paired against. The strength meter uses quantitative trading methods that rank and scale currencies cross-sectionally. My trading friend Bob and myself came up with it and it has proven very useful. I have many times blindly taken trades by JUST looking at Sentiment and Strength. Entered Randomly - and checked back at key market close times. Discretionary traders get so used to trading with charts...
  • #198
  • Sep 11, 2019 8:28am Sep 11, 2019 8:28am
Good Morning Traders,

I will try to get to some of the comments and questions later.

Attached is the current sentiment snapshot.

Remember - This chart is already INVERTED so that we do not have to think about how retail is positioned.

If the indicator says Strong BUY - we want to look for buying ops

If the indicator says Strong SELL - we want to look for shorting ops

If the bubble is BIG (clearly can be seen overpowering other bubbles) that means retail is piling in - in the wrong direction. And we know what that means right?

So if you see a BIG BUBBLE in STRONG SELL - that means we can be a lot more confident in taking a selling position.

If you see a BIG BUBBLE in STRONG BUY - that means we can be a lot more confident in taking a buying position.
Attached Image (click to enlarge)
Click to Enlarge Name: sentiment.JPG Size: 39 KB
  • #199
  • Sep 11, 2019 9:24am Sep 11, 2019 9:24am
sentiment remains the decider of market
  • #200
  • Sep 11, 2019 10:17am Sep 11, 2019 10:17am
Quoting SentiFX
Good Morning Traders, I will try to get to some of the comments and questions later. Attached is the current sentiment snapshot. Remember - This chart is already INVERTED so that we do not have to think about how retail is positioned. {image}
It would be helpful if there was a time stamp on the graphic, then we can tell if the position is getting stronger or weaker.
It never gets easier, you just get better
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